Weal

Shareholding model
Shareholding model, converting personal energy into equity
Chapter 9 p.9
A colleague of mine said that the fact that you can get shares in a company compensates for the lack of job security. I thought that I had a secure job!
Can you explain this concept of shareholding to me?
There will never be job security. You will be employed as long as you add value to the organization, and you are continuously responsible for finding new ways to add value.
In return, you have the right to demand interesting and important work, the freedom and resources to perform it well, pay that reflects your contribution, and the experience and training needed to be employable here or elsewhere. Ultimately, an objective of the organization is to maximize shareholder value and the question is ‘how’ this is to be achieved?
Your company’s vision endorses a quest to maximize the creation of sustainable wealth through effective ownership and participation. In the light of the fore going fiduciary duties, the following points would characterize the application of the “Entrepreneurial Shareholding Model”.
Shares will only be issued or purchased by the company when growth has occurred and is reflected in the company’s profits.
This may require the company to be cash positive and having cash assets which can be converted into cash. The percentages that will be used to distribute the profit and shares will be set by a process of evaluating economic value and negotiating and apportioning of shares accordingly.
In accordance with the your company shareholding model, shares can be issued to those employees that are considered to have made an entrepreneurial contribution to the growth of the business.
OK, that last point explains to me how I will qualify for shares in the company. I’ve also heard of “Entrepreneurial Energy” before. How does it link with shareholding?
Your company identifies three principle contributors that have a varying effect on the creation of sustainable wealth:
Varying effect of the principal contributors:
Financial investment/capital and associated financial risk or exposure, into an entrepreneurial venture.
Entrepreneurial energy, sometimes referred to as ‘sweat’ capital, which is needed to establish, grow and direct the
venture into sustainable wealth creation. This also includes personal risks and all its attributes.
Platform, including intellectual capital, suppliers and customer relationships, and organizational processes, which give rise to the workings, existence and operations of the venture.
That’s interesting! Can you tell me more about “Entrepreneurial Energy?”
To establish, grow and direct a company into an organization capable of sustainable wealth creation requires a process.
An integral part of this process is risk management, including risk assessment. When assessing the entrepreneurial energy contributed by individuals to the organization, the following criteria are applied:
Individual energy:
Achievement
Calculated Risk Behavioral (entrepreneurial).
The extent to which individual energy achieves goals.
Focusing on sustainable wealth creation.
The appraisal of individual achievement forms an integral part of the entrepreneurial sector within the shareholding framework.
Calculated risk
Imperative to a successful entrepreneurial business is successful risk management.
Your business recognizes that both the individual and the organization takes risks in creating and growing sustainable wealth.The diagnosis of the individual’s risk versus the organization’s risk management leads to the development of a ‘Calculated Risk Balance Sheet’.
Behavioral
Creating sustainable wealth emphasizes and calls for behavioral attributes that bring to bear successful stewardship.
Parameters for diagnosing behavioral participation include:
People management.
Planning and scheduling.
Monitoring, controlling and reporting.
Implementing and organizing.
By now it should be clear that being part of the company, is not just about being at work and getting a salary. The ultimate focus is on the contribution you can make to the sustainable wealth creation of the company.
On the other hand, your company recognizes that the sharing of wealth is a natural progression for entrepreneurs. The company strives towards Holistic Compensation for contributions made; where it is not only about what you take home each month, but where compensation fulfills needs on different levels for the individual, while also contributing towards building the organization. Converting energy into equity is one way in which this can be achieved.

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Shareholding model, converting personal energy into equity

Chapter 9 p.9

w&t_question

I Ask

A colleague of mine said that the fact that you can get shares in a company compensates for the lack of job security. I thought that I had a secure job!

Can you explain this concept of shareholding to me?

w&t_exclamation

I Answer

There will never be job security. You will be employed as long as you add value to the organization, and you are continuously responsible for finding new ways to add value.

In return, you have the right to demand interesting and important work, the freedom and resources to perform it well, pay that reflects your contribution, and the experience and training needed to be employable here or elsewhere. Ultimately, an objective of the organization is to maximize shareholder value and the question is ‘how’ this is to be achieved?

Your company’s vision endorses a quest to maximize the creation of sustainable wealth through effective ownership and participation. In the light of the fore going fiduciary duties, the following points would characterize the application of the “Entrepreneurial Shareholding Model”.

  • Shares will only be issued or purchased by the company when growth has occurred and is reflected in the company’s profits.
  • This may require the company to be cash positive and having cash assets which can be converted into cash. The percentages that will be used to distribute the profit and shares will be set by a process of evaluating economic value and negotiating and apportioning of shares accordingly.
  • In accordance with your company shareholding model, shares can be issued to those employees that are considered to have made an entrepreneurial contribution to the growth of the business.
w&t_question

I Ask

OK, that last point explains to me how I will qualify for shares in the company. I’ve also heard of “Entrepreneurial Energy” before. How does it link with shareholding?

w&t_binoculars

I Explain

Your company identifies three principle contributors that have a varying effect on the creation of sustainable wealth:

w&t_ch9_j_your_shareholding_model_converting_energy_into_equity

Varying effect of the principal contributors:

Financial investment/capital and associated financial risk or exposure, into an entrepreneurial venture.

Entrepreneurial energy, sometimes referred to as ‘sweat’ capital, which is needed to establish, grow and direct the venture into sustainable wealth creation. This also includes personal risks and all its attributes.

Platform, including intellectual capital, suppliers and customer relationships, and organizational processes, which give rise to the workings, existence and operations of the venture.

w&t_question

I Ask

That’s interesting! Can you tell me more about “Entrepreneurial Energy?”

w&t_exclamation

I Answer

To establish, grow and direct a company into an organization capable of sustainable wealth creation requires a process.

An integral part of this process is risk management, including risk assessment. When assessing the entrepreneurial energy contributed by individuals to the organization, the following criteria are applied:

Individual energy:

Achievement

  • Calculated Risk Behavioral (entrepreneurial).
  • The extent to which individual energy achieves goals.
  • Focusing on sustainable wealth creation.
  • The appraisal of individual achievement forms an integral part of the entrepreneurial sector within the shareholding framework.

Calculated risk

  • Imperative to a successful entrepreneurial business is successful risk management.
  • Your business recognizes that both the individual and the organization takes risks in creating and growing sustainable wealth.The diagnosis of the individual’s risk versus the organization’s risk management leads to the development of a ‘Calculated Risk Balance Sheet’.

Behavioral

Creating sustainable wealth emphasizes and calls for behavioral attributes that bring to bear successful stewardship.

Parameters for diagnosing behavioral participation include:

w&t_binoculars

I Explain

By now it should be clear that being part of the company is not just about being at work and getting a salary. The ultimate focus is on the contribution you can make to the sustainable wealth creation of the company.

On the other hand, your company recognizes that the sharing of wealth is a natural progression for entrepreneurs. The company strives towards Holistic Compensation for contributions made; where it is not only about what you take home each month, but where compensation fulfills needs on different levels for the individual, while also contributing towards building the organization. Converting energy into equity is one way in which this can be achieved.